Skip to main content

Can the Basis Remain Consistently Non-Zero for Long Periods?

While the funding rate mechanism is designed to push the basis toward zero, it can remain consistently non-zero for extended periods, especially during sustained market trends. For instance, in a prolonged bull market, the contract may trade at a persistent premium, leading to consistently positive funding rates.

However, the funding rate itself acts as a counter-pressure that limits how far the basis can diverge.

What Happens to the Funding Rate during Periods of Extreme Market Volatility?
How Can a Trader Use the Funding Rate to Execute a ‘Funding Rate Arbitrage’ Strategy?
How Does the ‘Basis’ Relate to the Funding Rate in a Futures or Swap Contract?
Can a TWAP Oracle Be Manipulated, and If So, What Are the Common Attack Vectors?